Globalization: Impact on Accounting Education

Globalization is an important concept and has been considered a business phenomenon. Globalization refers to the continued integration of markets as a result of businesses moving more frequently worldwide. Accounting is a byproduct of the business sector so it sees these changes and transformations. These changes and transformations have affected not only accounting standards and principles, but they also have affected accounting education. Due to globalization and more businesses going worldwide, the need to understand more than just what is accepted under the Generally Accepted Accounting Principles (GAAP) has become increasingly more important. It is important to have an understanding of the International Financial Reporting Standards (IFRS). The adoption of IFRS around the world has had a great impact on accounting education. The adoption of the IFRS however can be seen as part of larger movement which involves the globalization of businesses around the world, including that of small businesses So much so that the IFRS has issued IFRS for Small and Medium Sized Entities (Needles Jr., 602). This has made it easier not only for small businesses, but also accounting professionals to have a specific set of guidelines. Since the profession of accounting will become more globalized over time accounting professionals and students will have a difficult time succeeding in the accounting field without continued education and familiarization to new and global accounting standards.

Globalization of accounting has some troubles and consequences for accounting education due to the different accounting standards that come along with it. The major trouble is the education and how the International Federation of Accountants (IFAC) or the International Accounting Education Standards Board (IAESB) will be capable of coordinating accounting education globally (Needles Jr. 602). There is becoming more and more of a need for a universal set of accounting standards and this is something which would simplify the global education of accounting. There is a public interest for a universal standard and the development of a high quality standards for financial reporting. With a universal standard the education of accounting would not be as varied and it would not contain multiple standards following different financial and tax laws of different countries as it does now. The U.S. set of standards GAAP historically has been considered the highest quality set of financial accounting and reporting standards around the world.There are many similarities between GAAP and international standards however significant differences do exist and these differences become a difficulty for accounting professionals. Since accounting standards are always evolving it is difficult enough to be able to educate based off one set of standards. The current lack of a universal accounting set of standards has made accounting education lag behind that of where the accounting profession is now. With a universal set used by every country and a governing body that is focused solely on expanding and improving that set of standard, this can be seen through the increase use of the IFRS.

Understanding global standards, specifically the largest current global standard the IFRS is important to accounting education. Through the globalization of accounting education, the IFRS has become extremely important in the accounting profession. The rise of IFRS and the fact that the differences between IFRS and GAAP are becoming smaller is a good step in the globalization of accounting education since it is easier to teach. Most fortune global 500 are now using IFRS. There has been a movement towards principle based standards has been suggested since it would not only accommodate different countries laws, but it would also faithfully represent the financial transactions and events (Needles Jr 601). The problem with going with a system of principle based standards is educating students in it and how professors would be able to teach these principles without the framework of them.

In conclusion globalization has had a major effect on accounting education not just in the United States but in many countries. As many countries attempt to understand and interpret the different accounting principles of different countries it, for example Japan offers a test which tests for knowledge of both the U.S. GAAP principles and the IFRS. Accounting curriculum will need to continue to develop and the focus on global practices should be inserted into the core of the curriculum. In the U.S., IFRS should be taught just as much as GAAP and requirements for students to globalize their understanding of accounting. Students need to have a global understanding that surpasses that of just an understanding of GAAP. Instead of just education students on the financial and tax systems of the country they belong to they must learn and have a comprehensive understanding of the international financial and tax systems. Globalization will continue to bring many benefits but with those benefits it poses a challenge for the accounting profession and the way in which education standards are set and the way in which students are taught accounting.


Needles, B. E. (2010). Accounting Education: The Impact of Globalization. Accounting Education, 19(6), 601-605. doi:10.1080/09639284.2010.501578